The dispute over the tax rate on a US$15.3M signing bonus could affect Tavares’s future in Toronto and the ability of Canadian professional sports teams to sign top players
Toronto Maple Leafs captain John Tavares is taking the Canada Revenue Agency to court in a fight over more than $8 million in taxes and interest the government says the star forward owes.
The dispute is over the signing bonus Tavares received for joining the team nearly six years ago. But the outcome could affect Tavares’s future in Toronto and, more broadly, the ability of Canadian professional sports teams to sign pricey top players.
The appeal claims the CRA incorrectly calculated the taxes he owes on the US$15.3 million signing bonus the Leafs paid him after his contract ended with the New York Islanders in 2018.
Tavares argues the bonus should have been taxed at only 15 per cent under a provision of a Canada-U.S. taxation treaty, which sets the lower tax rate for “inducements,” such as signing bonuses, paid to athletes, artists, actors and musicians.
The CRA assessed that he must pay a rate of over 38-per-cent on the bonus, plus interest, but it has not yet filed a response to the appeal. None of the allegations have been proven in court.
The outcome of the case could have a bearing on professional sports franchises looking to offer big signing bonuses to convince unrestricted free agents to play north of the border — a task made harder by the Liberal government’s decision to raise the top federal tax rate from 29 per cent to 33 per cent in 2016.
The tax dispute could also discourage Tavares, 33, from re-signing with the Leafs when his current seven-year, US$77 million contract ends after next season. The vast majority of the star player’s compensation for the team is structured as a bonus, with Tavares taking a salary of less than $1 million per year.
“Tavares is a marquee player and there was a great amount of interest by the Bidding Teams in signing him,” his lawyers state in the appeal filing to the tax court.
At the time, Sports Illustrated said the higher combined tax rates in Canada and Ontario meant Tavares’s effective take-home pay would be US$4.5 million per year if he signed with Toronto, compared to US$5.9 million if he had inked a deal with Dallas.
But the Mississauga, Ont., native surprised hockey-watchers by signing with the Leafs, saying it was his childhood dream to play for his hometown team. He says he turned down larger bids from other teams to play in Toronto, including a US$91-million, seven-year offer from San Jose.
The US$15.3-million signing bonus offered by Toronto “was integral” in his decision, the appeal says.
The CRA’s reassessment says Tavares’s income for 2018 was $17.8 million higher than reported, and calculated that he owed an additional $6.8 million in taxes, plus $1.2 million in interest on the arrears, according to the appeal.
“The signing bonus was consideration for Tavares — a uniquely skilled and sought-after unrestricted free agent — committing to the seven-year Contract with the Toronto Maple Leafs,” the appeal says, claiming it was “not salary, wages or other remuneration in respect of employment.”
The $17.8-million payment in the CRA’s sights represents only the 2018 portion of Tavares’s entire signing bonus, which totals US$70.9 million over the term of his contract. The remainder of his overall compensation is paid in an annual salary of $910,000.
Tavares’s appeal argues that the bonus is different from salary, because it would still be paid to him if he were traded, sent to the minors or injured, and it should not be considered normal income for tax purposes.
As such, he argues, the 2018 portion of the bonus should be taxed at only the 15-per-cent U.S. inducement rate.
But there are tax mechanisms, such as retirement compensation agreements, that can be used to defer income and offset the disadvantage of playing for the Toronto Blue Jays, Toronto Raptors or any of Canada’s seven NHL teams.
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TORONTO – The Canadian Institute for Health Information says more than 7,000 people with diabetes undergo a leg, foot or toe amputation every year — and the majority of those procedures could have been prevented.
The report issued today says people with diabetes living in the lowest-income neighbourhoods are three times more likely to have an amputation than those living in the highest-income communities.
It also says people with diabetes living in remote communities are at higher risk of leg amputations than those living in urban centres.
Erin Pichora, CIHI’s program lead for population health, says lack of access to a primary-care provider to help people manage diabetes is one likely factor behind the inequalities.
She says disparities are also likely in access to specialists who can treat diabetic wounds on people’s feet — including podiatrists and chiropodists — before they worsen.
Diabetes Canada says the report shows the importance of ensuring people with diabetes have equitable access to the care and resources they need.
“People living with diabetes who undergo amputations face significant emotional and financial distress,” Laura O’Driscoll, senior manager of policy at Diabetes Canada, said in an emailed statement to The Canadian Press.
“We need to ensure that everyone with diabetes has affordable, timely access to the medications, devices, education, and care needed to manage their condition and prevent complications like amputation.”
The CIHI researchers reviewed hospital records from across Canada for fiscal years 2020-2021 and 2022-2023 and found about 7,720 “lower limb” amputations associated with diabetes per year among people 18 and older.
Each year there were about 3,080 hospitalizations for “above-ankle” leg amputations and 4,640 hospitalizations for “ankle-and-below” amputations, including feet and toes.
This report by The Canadian Press was first published Sept. 26, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
The Canadian Press. All rights reserved.
GRAND FORKS, B.C. – Wildfire officials say an evacuation order for the B.C. southern Interior town of Grand Forks, has been downgraded to an alert, even as an out-of-control wildfire in Washington state surges north and threatens to cross the border.
The Regional District of Kootenay Boundary says residents must be ready to leave at a moment’s notice since the Goosmus wildfire remains a risk to life and safety.
Emergency Info BC says the updated alert, posted late Wednesday, is in place for west of Highway 41 and south of Highway 3, as well as properties west of Highway 3 from Sleepy Hollow Rd to Phoenix Rd.
It is advising everyone under alert to review their emergency plans and stock a grab-and-go bag.
The district says that when necessary, residents should leave via Highway 3, go to the Jack Goddard Memorial Arena in Grand Forks, and wait in their vehicles until the reception centre opens.
The district says if you cannot evacuate at that time, you should call 911.
The BC Wildfire Service dashboard says the fire was discovered Wednesday and is about two square kilometres in size.
Mark Stephens, director of the district’s emergency operations centre, called it “a very fast-moving and developing situation.”
“We ask everyone to stay vigilant and to keep checking the (regional district’s) website for information,” he said in an online statement.
This report by The Canadian Press was first published Sept. 25, 2024.
The Canadian Press. All rights reserved.
Calgary police fired stun guns at a man and punched him in the head before he was put in restraints and died, investigators with Alberta’s police watchdog said Wednesday.
The Alberta Serious Incident Response Team, or ASIRT, said in a release that police were called on Sept. 17 about a man loitering near the check-in desk of the Carriage House Hotel and Conference Centre.
The agency said the man appeared dazed when he was told to leave by an officer. The man tried to pick up items from the floor that weren’t there.
When the officer pointed a Taser at the man, ordering him again to leave, ASIRT said the man raised his hands and started to walk out. He told police: “I don’t want to die.”
“The lone officer tells the male to stop talking and continues to point the weapon at him,” the agency said.
It said two other officers began walking through the main doors toward the man, and he stopped and repeated that he didn’t want to die. The first officer put away his Taser and tried to grab the man.
“At no point during the interaction had the male been identified, nor was he ever told he was being detained or under arrest,” ASIRT said.
It said the man physically resisted the officer and was tackled to the ground by another officer, who then punched the man in the head. At this point, ASIRT said the three officers fought the man for 3 1/2 minutes with “various uses of force.”
The man was put in handcuffs and leg restraints, and a spit mask was placed on his mouth, said ASIRT.
“The male is noted to be bleeding from the mouth and vomits,” the agency said.
It said seven minutes later, the man was sedated by emergency crews and left lying face down. After three more minutes, he was found to be unresponsive.
“The male was then provided medical care but declared deceased at the scene.”
Calgary police said in a release that same day that officers were called to the hotel for a man “acting erratically” in the lobby who was refusing to leave. They said the man wasn’t co-operating and was still being combative after a Taser was pulled out.
Police said the man was pepper-sprayed and taken into custody and shortly after went into medical distress.
A police spokeswoman said Wednesday the three officers involved have been placed on a standard 30-day leave.
“We know there’s a family and a community grieving this loss and our thoughts are with them during this difficult time,” said a statement.
ASIRT, which looks into serious allegations of police misconduct, said its investigation will examine the use of force by the officers.
This report by The Canadian Press was first published Sept. 25, 2024.
— By Aaron Sousa in Edmonton
The Canadian Press. All rights reserved.
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